"Not Medically Necessary": Helping America's Health Insurers Deny Coverage

Original Article ↗ Hacker News Discussion ↗

Health insurers in the U.S. increasingly use algorithms, non-specialist reviewers, and complex prior-authorization processes to deny or delay care, often labeling physician-ordered treatments as “not medically necessary.” Commenters describe how this shifts costs and administrative burdens onto patients and providers, drives up overall system inefficiency, and is reinforced by profit incentives in both private insurance and Medicare Advantage. Many argue that only structural changes—such as stronger regulation, transparency, or single-payer models—will realign incentives toward patient welfare rather than denial-driven cost control.

Front-line experiences with denials

  • Clinicians describe “peer-to-peer” reviews as gatekeeping by non-specialists (nurses, therapists, other specialties) who can block rehab or hospital care as “not medically necessary.”
  • These calls are usually unpaid, but time spent fighting denials gets baked into higher visit/procedure rates.
  • Some clinicians aggressively contest denials; others give up, leaving patients without services or with large bills.
  • A former insurer call-center worker reports being undertrained, pressured to default to denial, and eventually just approving everything out of discomfort and confusion.

Is this “practicing medicine”?

  • One side argues that deciding what is “medically necessary” is de facto medical practice, should require appropriate specialty credentials, and ought to carry malpractice-style liability.
  • Others state that, legally, insurers are only deciding what they’ll pay for, not what care a patient may receive; the doctor and patient can still proceed if they self-pay. Critics call this a legal fiction, as cost effectively blocks care.
  • Several note that state rules vary on whether physicians must review denials; federal law is described as relatively weak or absent here.

System design, incentives, and blame

  • Commenters emphasize misaligned incentives: for-profit insurers gain by denying or delaying, while providers may over-test, over-treat, or profit from owning equipment.
  • Debate over where most waste lies:
    • One camp blames insurers and their denial machinery, prior auth hoops, and vertical integration (insurers buying provider groups).
    • Another points to providers’ high prices, overprescription, and administrative inefficiency as the main cost drivers.
  • There is extended back-and-forth over how much insurer-driven administrative burden actually contributes to total costs, with no consensus.

Medicare Advantage and privatization

  • Traditional Medicare plus Medigap is portrayed as more predictable and less adversarial; Medicare Advantage is seen as cheaper upfront but denial-heavy and highly profitable for insurers.
  • Some argue private plans were supposed to be more efficient but now cost the government more per enrollee and rely heavily on utilization management.

Reform ideas and workarounds

  • Proposals include: stronger penalties for wrongful denials, requiring same-specialty reviewers, banning non-physician determinations of “medical necessity,” breaking up vertically integrated “payvider” giants, and moving to single-payer or fully privatized models (sharp disagreement here).
  • Technical efforts like standardized prior-authorization APIs are mentioned as partial, process-level improvements.
  • Tactics to fight denials (HIPAA “hacks,” regulators, startups that automate appeals) are discussed; some success, some debunked, and many report exhaustion from the effort.